Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159453
Authors: 
Bottazzi, Laura
Da Rin, Marco
Hellmann, Thomas
Year of Publication: 
2007
Series/Report no.: 
Quaderni - Working Paper DSE 612
Abstract: 
This paper examines the effect of trust in a micro-economic environment, where trust is clearly exogenous. Using a hand-collected data on European venture capital, we show that the Eurobarometer measure of trust among nations significantly affects investment decisions. This holds even after controlling for investor and company fixed effects, geographic distance, information and transaction costs. The national identity of venture capital firms' partners is shown to matter for the effect of trust. We also considers the relationship between trust and sophisticated contracts involving contingent control rights. We find trust and sophisticated contracts to be complements, not substitutes.
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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